It has been more than two years since the legal profession first voted in favour of accepting alternative business structures. However it is only in the past few months the debate has become a lot more heated.

Part of the Legal Services (Scotland) Bill means non-solicitors will be able to use alternative business structures (ABS) to invest in law firms. The change is being proposed as a similar system is being implemented in England and Wales which will be fully up and running in 2011. This led to fears scottish firms would be at a competitive disadvantage.

The Law Society of Scotland, which has around 10,000 members, has supported the creation of ABS since May 2008 when a vote at its AGM was 801 for and 132 against. since the Bill was introduced at the Scottish Parliament in September last year the issue has become more divisive. a Law society referendum in april had 2245 votes in favour of ABS - as long as there were appropriate safeguards - with 2221 against. Then a special general meeting later that month had 1817 votes in favour of a motion from the Scottish Law Agents Society against ABS, with 1290 against the motion.

One of the main worries is the independence of advice could be threatened if non-solicitors owned a firm. Alan Thomson, chairman of McClure Naismith, says: "The ability to stand up in court without fear or favour is an important aspect of what the legal profession does in the UK. One of the risks is external control may have some influence there."

The overall argument has often been pitched as big firm against little firm but this is not quite so black and white. For instance Bill Drummond of Brodies, which ranked at four in Insider's listings, says: "Our board has taken the view there are some pretty big structural difference between us and England. We don't think the proposals are a particularly good idea. When we are seeking to attract external investment and engage major markets we need a robust set of solutions for businesses and individuals within our market."

With increasing numbers of firms operating across the UK there are concerns some may transfer functions out of scotland if ABS is not supported. Lorna Jack, Law Society of Scotland chief executive, says: "Their operations up here would then become branches of an operation down south. They have to think about the big businesses they run and how they might be strategically tied if they can't do this."

Richard Masters of McGrigors says: "It would be very difficult for us to allow a situation to arise where the regulatory environment was very different to the regulatory environment our competitors were operating under. If some of the other national law firms could access lines of capital we couldn't because of the different position then it has a potential negative effect on competition and client service."

Alister Fraser of Semple Fraser says: "It's absurd to think one of the legal systems in the UK is going to have one regime for the ownership of law firms and the other will have another. If you want to vote for the death knell of the scottish legal profession, which encompasses the large and small, then we should knock back ABS."

In tandem with the ABS debate is how any new regime should be regulated. at least here there is clarity with 81 per cent of solicitors who voted wanting the Law society to be the regulators. Few firms believe there is any need to split the regulatory and membership function of the society in a similar way as happened in England and Wales. The Law society's Jack says: "I see us as a professional body. If you break that into two I think you would end up with a regulator like the Financial services authority which doesn't have a professional discipline behind it."

Negotiations to find an answer to the ABS debate and who should regulate are ongoing. McClure Naismith's Thomson says: "The important thing at the end of the day in whatever shape it comes is the necessary regulatory safeguards are in place. at the moment we have a very clear understanding of what it means to be a solicitor in scotland and once you open up the provision of legal services to others what is important is the public know there is an appropriate regulatory framework in place." n